Plaintiff v First Defendant

Plaintiff v First Defendant - [2015] VSC 75 - VSC 2015 case summary — Zoe

[67]

b. Punitive Damages

Punitive damages are available under the TVPA because the Act's 'civil remedy provision creates a cause of action that sounds in tort.' Ditullo, 662 F.3D at 1096. '[P]unitive damages are warranted when the defendant is found liable for conduct involving some element of outrage similar to that usually found in a crime.' Id AT 1097 (internal quotations omitted). Punitive damages awards should be based on 'the degree of reprehensibility of the defendant's conduct... and should reflect the enormity of [the defendant's] offense.' BMW of N.Am. v. Gore, [1996] USSC 42; 517 U.S. 559,575 (1996) (internal quotations omitted). Other factors courts should consider in awarding punitive damages include whether: 'the harm was physical rather than economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the conduct involved repeated actions or was an isolated incident; and [whether] the harm resulted from intentional malice, trickery, or deceit, or mere accident.' State Farm Mut. Auto. Ins. Co v Campbell, 538, 437 (2003) (citing Gore, U.S. at 576-77).

Here, the crime, involving sexual assaults, forced labour, and trafficking is particularly depraved. The harm was physical, it involved the intentional disregard for the health and safety of Mrs Doe, it was repeated - involving approximately fourteen instances of forced sexual acts, and the harm was planned with forethought and intentionally inflicted upon Mrs Doe.

In addition to the horrible circumstances relating to the sexual assaults, forced labour, and trafficking, Mrs Howard also traveled more than 8,000 miles from Virginia to Ethiopia in an attempt to locate Mrs Doe, even though knowing that the State Department's investigation into the trafficking matter was ongoing. Russell Howard telephoned Mr Doe and asked him to meet with Mr Howard at a hotel to discuss Mrs Doe and her whereabouts. After Mr Doe declined, Russell Howard called him back repeatedly. A couple of days later, Mr Doe learned that Russell Howard had contacted the Ethiopian police to request help in locating Mrs Doe. Howard also attempted to file bogus criminal charges against Mrs Doe. These attempts at contact exacerbated Mrs Doe's trauma and her ongoing fear.

None of the civil judgments discussing punitive damages amounts under the TVPA are analogous to Mrs Doe's case in that none have involved forcible rapes or sexual assaults. Thus, the Court considers not only punitive damages awards in TVPA cases, but also punitive damages awarded in sexual abuse cases. In Canal v Dann, a case that did not involve sexual abuse, the district awarded a punitive damages award equal to the compensatory damages award - $309,406.41 - after finding that the defendant 'acted with a conscious disregard for [plaintiff's] right to be free from involuntary servitude and [the defendant] intentionally misrepresented facts for the purpose of depriving her of this right.' No. 09-03366, 2010 U.S. Dist. LEXIS 97856, *11 (N.D. Cal. Sept 2, 2010). In Waxman v Bough, the plaintiff, at age six, was repeatedly sexually assaulted by his sixteen-year-old babysitter. No. 1:07-CV-01180 (E.C. Va. June 11, 2008). The jury awarded $2,250,000 in punitive damages. In Buhalo v. City of Philadelphia, the jury awarded $3,500,000 in punitive damages for a single incident of rape. No. 03-4727 (E.D. Pa. Nov.9, 2006). Mrs Doe's case involves four incidents of rape and multiple incidents of forced oral sex.

In light of the Howards' intentional egregious and outrageous conduct, and the fact that Mrs Doe continues to live in a constant state of terror, the Court finds that an award in the amount of $2,000,000 is appropriate.

[163]

These particulars are consistent with the contents of the affidavit sworn by Mrs Howard which I have set out at [50]-[52]. Put simply, Mrs Howard alleges that Jane Doe falsified her evidence, in that she was never subjected to sexual servitude and/or human trafficking, and has thereby obtained the US judgment by fraud. This alleged fraud is said to be contained in the Amended Complaint and Preliminary Statement filed in the US Court.
Rule 60(b)(3) of the US Rules enabled Mrs Howard to apply for the US judgment to be set aside on the basis of fraud. No application has been made before the US Court. Nor was any application made to review the report and recommendation of the magistrate judge. None of the allegations contained in the defence or in Mrs Howard's affidavit were raised before Magistrate Judge Jones or Judge O'Grady. I was told by counsel for Mrs Howard that his client now intends to take such action if funds frozen by the Court are released. This submission stretches credulity. Rather than immediately apply to set aside the judgment, Mrs Howard left the jurisdiction and made no attempt in the ensuing two years to set it aside. It was only after this proceeding was instituted, and her assets frozen, that any apparent consideration was given to what would have been an obvious first step if Mrs Howard genuinely wished to dispute the default judgment. I will return to this consideration in the context of the abuse of process point.
Returning to the question: whether it is open to Mrs Howard in this proceeding to challenge the enforcement of the US judgment on the basis that it was procured by fraud in the US Court - no such application having been made to the US Court.
At the outset it can be said that there is a real divergence in the jurisprudence of Commonwealth countries on this issue. In some jurisdictions (notably the United Kingdom) it is open to a party resisting enforcement proceedings to allege that the foreign judgment was procured by fraud and, in effect, re-litigate the case whether the judgment was obtained on the merits or by default. In other jurisdictions (notably Canada and several other Commonwealth countries) a foreign judgment is treated no differently to that obtained in the local jurisdiction. So in Australia, for example and as I will explain shortly, if this approach was adopted it would require proof of the existence of facts germane to the judgment which were not known to a party at the time of the trial.
I pause here to note that counsel for Mrs Howard did not suggest that any of the material facts which Mrs Howard now deposes to in her affidavit were not known by her prior to the US hearings. Rather, counsel argued that I should follow the UK approach. If I did so then he contended that Mrs Howard's affidavit disclosed an arguable defence with reasonable prospects of success and that the summary judgment application should be refused. I indicated in discussion with counsel that in the light of the Lysaght test it would be inappropriate to proceed to summary judgment if Mrs Howard was, in accordance with the UK approach, permitted to raise her allegations as to the veracity of Mr Doe's account. Accordingly, I accept that if the UK approach applies then the summary judgment application must fail and Mrs Howard would be entitled to go to trial.
On the other hand if the Canadian test (followed in several Australian and other Commonwealth decisions) applies, then absent fresh evidence (which is not suggested), it is not open to Mrs Howard to raise these allegations in this proceeding and there is no bar to summary judgment in favour of Jane Doe.

[178]

The position taken in several New South Wales decisions differs from that of the English courts and is consistent with the Canadian approach, as set out in Beals.
In Keele v Findley,[79] Rogers CJ Comm D of the Supreme Court of New South Wales was asked to enforce the judgment of the Superior Court of Arizona for the County of La Paz. The defendants contended that the judgment was obtained by fraud in the sense that it rested upon perjured evidence. The plaintiffs submitted that it was not open to the defendants to rely upon fraud of the kind alleged in order to resist the enforcement of the judgment.
In the course of his reasons, Rogers CJ Comm D referred to judgment of Kirby P in Wentworth v Rogers (No 5),[80] which set out the relevant principles concerning domestic judgments allegedly obtained by fraud, which can be summarised as follows:
- (a) New discovery of a material fact: It must be shown, by the party asserting that a judgment was procured by fraud, that there has been a new discovery of something material, in the sense that fresh facts have been found which, by themselves or in combination with previously known facts, would provide a reason for setting aside the judgment.
- (b) Mere suspicion is insufficient: Mere suspicion of fraud, raised by fresh facts later discovered, will not be sufficient to secure relief. The claimant must establish that the new facts are so evidenced and so material that it is reasonably probable that the action will succeed.
- (c) Ordinarily perjury is not enough to set aside the judgment: Although perjury by the successful party or a witness may, if later discovered, warrant the setting aside of a judgment on the ground that it was procured by fraud, and although there may be exceptional cases where such proof of perjury could suffice, without more, to warrant relief of this kind, the mere allegation, or even the proof, of perjury will not normally be sufficient to attract such drastic and exceptional relief as the setting aside of a judgment.
- (d) The successful party must be responsible for the fraud: It must be shown by admissible evidence that the successful party was responsible for the fraud which taints the judgment under challenge. And the evidence in support of the charge ought to be extrinsic.
- (e) Onus is on the party alleging fraud: The burden of establishing the components necessary to warrant the drastic step of setting aside a judgment, allegedly affected by fraud or other relevant taint, lies on the party impugning the judgment. It is for that party to establish the fraud and to do so clearly.[81]
In Keele, Rogers CJ Comm D held that no distinction should be drawn between a foreign and domestic judgment in determining whether it should be set aside by reason of fraud and concluded:

[194]

To recap, the English approach permits a defendant to an application to enforce a foreign judgment to raise an allegation of fraud before the local court, even if it has been ventilated before, and adjudicated upon by, the foreign court.
The approach in Keele requires a party to satisfy the local test when seeking to set aside a judgment. Of particular relevance here, the party alleging fraud must establish that the allegation rests on evidence not previously available to be produced to the foreign court and that such evidence (whether alone or in combination with evidence given at the trial) would have probably altered the result in the foreign court.
It is not necessary for me to traverse decisions such as Farah Constructions Pty Ltd v Say-Dee Pty Ltd,[101] Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority[102] and CAL No 14 Pty Ltd v Motor Accidents Insurance Board[103] in determining how to treat the statements of the intermediate appellate courts which have endorsed the Keele approach. In neither Quarter Enterprises nor Prider was the court required, as part of its ratio, to decide which of the English authorities or Keele represented the law in New South Wales or South Australia in relation to enforcement at common law of foreign judgments. The comments of both are obiter dicta.
Having said that, the appropriate approach, I think, is that stated by the High Court in Cook v Cook in which non-binding authority was said to be 'useful only to the degree of persuasiveness of their reasoning'.[104] Of course that reasoning when emanating from intermediate appellate court(s) must be given considerable weight.
In my opinion the reasoning of Bathurst CJ and Bleby J, at appellate level, and of Rogers CJ Comm D, at trial level (supported by a number of single-judge decisions),[105] are highly persuasive on this point, and I respectfully agree. I prefer this approach to that of Yoon v Song.
I adopt what is said by the learned authors of Nygh's Conflict of Laws in Australia:[106]

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